Can my creditors take legal action, such as seizing property or garnishing wages, while a consumer proposal is pending?
The filing of a Consumer Proposal imposes a powerful Stay of Proceedings which prevents creditors from taking action in order to recover their debts. If there is already a garnishment on your wages, the Stay requires that it be removed and that you receive your full pay.
While the proposal is pending, and if it is accepted by the creditors, the Stay of Proceedings remains in place. However, if the creditors reject the proposal, the Stay of Proceedings is lifted right away, and the creditors can begin to take action again.
Finally, if you have secured debts, such as a mortgage or a car loan, you must continue to pay them in a proposal, whether it has been accepted or not.
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